If the FCRC or LTC-ADI decides that a transfer does not meet one of the allowable transfer criteria (see PM 07-02-20-b), the transfer is non-allowable. If the net value of all transfers is $5,000 or less, determine if the transfer is allowable and, if not, calculate the length of the penalty period. If the net value of all transfers is more than $5,000, complete a referral packet and send to HFS Long Term Care - Asset Discovery Investigation (LTC-ADI) for review (see PM 07-02-20-a). For non-allowable transfers, customers are subject to a penalty period for nursing home (NH), SLF, and DoA HCBS waiver services (see NOTE). If otherwise eligible, the person remains entitled to other covered medical services.
NOTE: Persons with a penalty period who are eligible for QMB benefits remain eligible for LTC services during the benefit period in which Medicare-covered SNF services are received.
For NH and SLF cases, do not allow a deduction from income for NH or SLF expenses and/or charges for DoA HCBS services incurred during a penalty period. For NH, SLF, or DoA HCBS waiver cases, do not allow these expenses to meet any spenddown amount. This applies whether or not the person received benefits during the penalty period.
When multiple non-allowable transfers are reported, combine them and treat them as a single transaction. Determine a single penalty period, equal to the total length of time (including partial months) the uncompensated amount (see NOTE) of resources transferred meets the person's monthly (30-day) LTC costs at the private rate. There is no maximum penalty period.
- For nursing home cases, use the private rate at the facility where the person lives.
- For SLF cases and for persons applying for or receiving DoA HCBS waiver services, contact the Bureau of Long Term Care at (217) 782-0545 for the long term care private rate to use in the calculation.
NOTE: The uncompensated amount is the fair market value of each transferred resource, minus any value received for the resource. The total uncompensated amount is equal to the sum of the uncompensated amounts for each nonallowable transfer made.
The beginning date of the penalty period is the later of:
- the date the person becomes otherwise eligible for NH, SLF, or DoA HCBS waiver services (including meeting any spenddown); or
- the first day of the month during which the transfer for less than FMV is made.
If a previous penalty period has not expired, the new penalty period (based on the criteria above) begins the day after the previous penalty period ends.
Once a penalty period is decided, it applies until the end of the calculated period unless events change regarding the transfer. Therefore, if the person leaves a facility and returns at a later date or stops receiving benefits and reapplies at a later date, the initial penalty period continues in effect until the end of the calculated period. When the following situation occurs, divide any remaining penalty period equally between spouses:
- the community spouse made a non-allowable transfer that results in a penalty period for the customer; and
- the community spouse enters an NH or SLF or applies for or receives DoA HCBS waiver services; and
- the community spouse is eligible for other covered medical services.
Notify persons of any penalty period, and of their right to appeal or to request a hardship waiver; see PM 01-08-00.
If eligible, authorize payment for NH or SLF services once the penalty period is over.